Pakistan Money Market Review
Updated on Apr 07,
2001
The interbank market maintained the soft stance as
witnessed from the previous weeks. Rates already under pressure also
fell further and remained at 1.50% and 2.00% throughout the week. FIB
maturity of Rs. 4.55 billion was another reason for the slide in short
term levels. The trading week was reduced to 4 days due to the holidays
on Wednesday and Thursday on account of 9th and 10th of Muharram,
respectively. The T-Bill auction settlement and maturity did cause an
outflow of approximately Rs. 15.70 billion but market players continued
to express their bearish outlook as witnessed by trades in the one and
two week tenors at 4.50% and 7.00% respectively. However towards the end
of trading hours on Friday, rates shot up with overnight activity as
high as 12.50%. The market remained well in double digits on Saturday
with rates shooting up to 12.90% towards close and banks having to
resort to the repo discount window for respite with discounting in
excess of Rs. 2.50 billion.
The ease of short term levels caused the term levels
to come under pressure as well, as seen from the one month trades as low
as 9.25%. Moderate amounts are dealt with trades mostly being conducted
on Monday while trades in forward from the auction settlement day were
reported to have traded at 9.75%. With reports of lenders having placed
funds for three month tenor as low as 10.50% and the three and six month
22nd March T-bills trading at rates of 10.80% and 11.25% as well in the
secondary market did reflect the sentiment of banks taking part in the
coming auction. As forecasted in our last weekly, bidding for the three
month paper in the auction was witnessed aggressively with bids as low
as 10.95% (*the previous three month cut-off yield being 11.27%) while
participation for the six and twelve month papers was witnessed around
previous levels. SBP accepted a total amount of Rs. 19.45 billion with
the three and six month cut-off being brought down to 11.18%, 11.58% and
the twelve month being raised and brought up to 12.00%.
A "tight monitory policy" is what the
authorities have committed to the IMF and accepting an amount of Rs.
19.45 billion against the pre-auction target of Rs. 3.50 billion does
seem to be a step in the direction. SBP has also announced a PIB auction
scheduled for the 17th of April with the target amount of Rs. 12
billion. Interest has been cropping up for new PIBs since the Valentines
issue i.e. the 14/02/01 PIB. Inflows on account of maturities of bonds
issued to public sector enterprises in 1996 have been witnessed in the
month of March and more are expected as well. We feel that participation
of around Rs 12 billion at nominal premiums is not a distant
possibility, specially afar the T-Bill auction result has ruled out any
imminent hike in interest rates.
| YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
| . |
THIS
WEEK |
1
WEEK AGO |
1
YEAR AGO |
|
1 Year |
12.25 |
11.90 |
08.00% |
|
2 Year |
12.65 |
12.40 |
08.75% |
|
3 Year |
12.85 |
12.75 |
09.50% |
|
4 Year |
13.00 |
13.00 |
09.75% |
|
5 Year |
13.25 |
13.25 |
10.25% |
|
10 Year |
13.50 |
13.50 |
11.00% |
| AUCTIONS |
| BID
DATE |
INSTRUMENT |
RESULT |
SETTLEMENT |
| Apr
03 |
T-BILL |
Apr
03 |
Apr
06 |
| TARGET AMOUNT |
BID AMOUNT |
ACCEPTED AMOUNT |
| Rs.3,500
Mln |
Rs.29,300 Mln. |
Rs.16,450
Mln |
|
|
| MATURITIES |
INSTRUMENT |
DATE |
AMOUNT |
|
T-Bill |
06 Apr |
3,710 Mln |
|
T-Bill |
13 Apr |
500 Mln |
|
T-Bill |
19 Apr |
5,200 Mln |
|
|
|
REPO RATES |
|
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
Overnight |
12.90 |
10.00 |
08.00 |
|
1 Week |
10.75 |
09.00 |
04.50 |
|
1 Month |
10.50 |
09.50 |
06.25 |
|
3 Month |
10.90 |
10.65 |
06.70 |
|
6 Month |
11.40 |
11.20 |
07.00 |
|
1 Year |
11.75 |
11.60 |
N. A. |
|
|
|
| TREASURY
BILL RATES |
| MATURING |
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
1 Month |
11.50 |
10.50 |
06.75 |
|
2 Month |
10.75 |
10.25 |
06.80 |
|
3 Month |
10.90 |
10.85 |
06.90 |
|
4 Month |
11.10 |
11.00 |
06.95 |
|
5 Month |
11.30 |
11.20 |
07.00 |
|
|
